Universal Life Insurance: Know Pros and Cons Before Choosing

Universal life insurance has many advantages but does have some downfalls; before choosing this type of policy, people should be aware of exactly what they are buying

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UniversalLifeInsurance.net

Jan 17, 2011, 07:40 ET

CHARLOTTE, N.C., Jan. 17, 2011 /PRNewswire/ -- Before a potential client decides to buy a universal life insurance policy, they should be aware of all the ins and outs of the plan. There are many advantages, but there are some downsides. Before choosing this type of policy, people should find out if it is the right plan for their specific situation.

There are many advantages to holding a universal life insurance plan. This type of policy combines two attractive elements of a term and a whole plan - limited term of cover with an investment component. When comparing this policy with a whole one, people will generally find universal coverage much more affordable. The amount and time of the premium payments can be planned and, depending on the policy, there can be a "no lapse guarantee" attached.

One of the more attractive qualities of universal life insurance is that the death benefit paid out to the beneficiaries can usually be increased or decreased. This flexibility is appealing to many people. It allows room for uncertainties that can arise. This can come with certain limitations that should be noted before making changes to a policy.

There are some disadvantages to these types of plans that should be considered before one opens a policy. A universal plan comes with less guarantees than whole ones and the cash value growth is more limited. Plus, there is not room for flexibility when it comes to the investment options. These two aspects alone can turn people to a whole plan instead.

Policyholders must be aware of additional costs. If there are any missed premium payments, there can be issues funding the policy. If certain items are added, like a "no lapse guarantee," there can be additional costs added to the premiums. If the death benefit is decreased, the policyholder may be subject to more charges.

When shopping to get quotes for universal life, people should consider what they need and do not need in a policy. They should weigh their options and consult an objective professional if needed before making a final decision on how to best protect their family's financial future.

About UniversalLifeInsurance.net:

UniversalLifeInsurance.net connects you to knowledgeable and experienced universal life insurance agents who can assist you in finding the right plan for your unique situation. Choosing the right coverage is an important decision. These qualified agents will help evaluate your specific needs and recommend plans that will fit these requirements. You can contact us by simply visiting the website. You will be on your way to protecting your loved ones in just a few simple steps.